FAQ

Why should I hire you instead of an American based CPA firm in a border city?

We often will find errors in returns prepared by US based preparers for a simple reason. We specialize in US taxes for US citizens and green card holders in Canada. This is what we do every day. Many US based firms, including those sitting in border towns, will not know or understand the issues that affect Americans in Canada, such as how to treat an RRSP, a TFSA, an RESP, their mutual fund investments, their businesses and trusts. We built our practice with the knowledge of how to deal with these and many other items affecting Americans in Canada.

Can you do our Canadian taxes also?

Not only can we do your American taxes, but we specialize in Canadian taxes as well with our staff preparing many Canadian individual tax returns every year. We also prepare many Canadian corporate, trust, and estate returns.

Why should we hire you to do our Canadian taxes instead of preparing them ourselves?

While we are happy to prepare your US returns only, having us prepare both Canadian and US returns makes more sense as we can set up your deductions and credits to maximize them in both countries.

What are the advantages to using you for both Canadian and American taxes?

When we prepare both Canadian and American taxes, we take advantage of the opportunities in both countries to minimize tax payable. We allocate deductions and credits to the appropriate places to ensure that the tax is as low as possible in both countries. What good is it to save a dollar in Canada but then pay it to the USA.

Why should I use your firm as opposed to a local accounting firm?

When you hire us, you are getting a firm that has the expertise of dealing with the many US tax issues that can affect your case. Many local firms will prepare a US tax return as a courtesy by just translating the Canadian return to US dollars. However, most local firms cannot properly prepare a US tax return due to a lack of expertise on the subject. Filing an incorrect or incomplete return can be worse for you than not filing at all. In addition, many of the firms that can competently prepare a US tax return charge inflated prices that many people can’t afford.

While many people like to be able to visit the office, this ability is not necessary for either of us. You need a properly prepared tax return and the ability to contact us when necessary. We have a toll free number so you can call us and we can be reached by email at anytime.

I heard that the US has many good online e-filing programs. Why shouldn’t I use one of them?

Most of the programs designed for online filing in the USA are designed for average American taxpayers. By virtue of the fact that you don’t live in the USA, these programs will leave out a lot of things you may need. In addition, unless you are well versed in US tax law, you might not even know what you are missing which can compound the problem. Furthermore, these programs don’t take Canadian income products into consideration; even the deluxe versions which are fairly expensive as well.

These products serve the American marketplace. Our business is primarily aimed at the American in Canada and as such, we know what forms are needed and how to properly prepare them.

What would indicate that my prior returns were not properly prepared or were not complete?

The following list shows some indicators that your current accountant is not properly preparing your US returns. Please note that these factors are not evidence of a bad return. If you spot some of these factors on your returns, you can contact our office for a review of the returns. The cost of the review will be credited toward any future work we do for you, including amending the old returns.

Here are the indicators:

1. Please look at the paid preparer section on page 2 of form 1040:
   • Who is listed as the paid preparer of the return? If any of the below three scenarios appear, your return may not have been properly prepared.
     • No preparer is listed on the return.
     • You pay an accountant to prepare your return and the returned was listed as self prepared. (If your accountants name is Self Prepared this does not apply)
     • The return is listed as being prepared by an unpaid preparer, but you paid for its preparation.
   • Is a PTIN number listed in the paid preparer section? If any of the below two scenarios occur, your return may not have been properly prepared.
     • No PTIN number is showing on page 2 of the return.
     • A 9 digit social security number is showing.
2. Has your accountant ever said any of the following:
   • You don’t owe anything so you don’t have to file.
   • You only have to pay tax in the USA on income earned in the USA.
   • You can’t receive a refund, you didn’t pay anything.
   • I can prepare your US return solely from your Canadian return and nothing else.
3. Did your accountant ask you about bank accounts or investment accounts outside the USA?
   • Do the terms FBAR & FATCA mean anything to you? If yes, were forms FINCEN Form 114 & 8938 included in your tax return?
4. Did your accountant ask you for information regarding your RRSP accounts?
5. Did your accountant ask you if you have any mutual fund investments?
   • If yes, was a separate form 8621 included in your return for each individual fund you own?
6. Did your accountant ask you if you have an RESP or a TFSA?
   • If yes, were forms 3520 & 3520A filed for these accounts?
7. Did your accountant ask you if you own more than 10% of the shares of any Canadian company?
   • If yes, was form 5471 prepared?
8. If you have children who are US citizens, did your accountant mention anything about tax credits or refunds available to you?

This sounds awfully expensive, how can I afford it?

While many firms in Canada charge a significant premium for US tax services, we understand that cost is an important component in your choosing a company to prepare your US taxes. We strive to ensure that the services you receive are top of the line, yet we charge prices designed for the average taxpayer to be able to file complete and correct returns annually. We don’t want to see people risking jail or significant fines and penalties for failure to file.

We have a flat pricing structure so you will know in advance approximately what your bill should be. Furthermore, we stand by our returns and are ready to defend them if they are challenged or audited by the IRS.

My local accountant charged me $200 for my entire return last year. Why are you so much more expensive?

Without reviewing your local accountants’ work, we cannot comment as to the quality of the work, nor can we comment on the pricing structure. However, if many of the points mentioned above in the “Prior returns were not properly prepared…” section appear on your return, then that would be a good indicator that your return is incomplete. If the accountant is not preparing a complete return, they should charge significantly less than a firm who would prepare the entire return. Furthermore, we only take on returns we know we can properly prepare. Once we prepare a return, we will sign it and defend it if the IRS comes calling. We want all our clients to be satisfied with our work.

In addition, the major accounting firms’ prices for US work range from very high to ridiculous reflecting the unique aspect of preparing a US return in Canada. As a small firm, we can afford to charge prices that are more reasonable than the bigger firms, while still providing complete, well prepared tax returns to our clients.

I am a Canadian accountant who prepares US returns for clients as a courtesy. Why should I give up this revenue stream to you?

Did you know there are rules in place regarding the filing of US individual tax returns for compensation? All people or firms who prepare tax returns for compensation are obligated to have a PTIN number, list the number on the return and sign the return. Failure to do this can result in your being in violation of US tax law. Any penalty imposed on you for this can put you in violation of your Canadian professional conduct rules. Check with your local institute or ordre for more information. While this PTIN is available to anyone who requests it, the IRS is tracking returns by the PTIN to ensure that returns are being properly prepared. If you are not completely trained in US tax, you are putting yourself and your clients at risk.

In addition, while most people mean well, there are a lot of nuances to the US tax code that can’t be reconciled with Canadian tax. If your clients have RESPs, TFSAs or mutual funds and you don’t properly report them, your clients will be liable for severely punitive penalties if they are caught having not filed an information return. Also, the statute of limitations does not run on an incomplete return, even if filed in good faith. Any errors you make can be costly to your clients and can result in your being sued by them for any mistakes made, especially if you don’t have the qualification to prepare these returns in the first place.

US taxes are what we do and we have no desire to steal your clients. We pledge that we will not offer any services to your clients if you can provide them the same service. In addition, if a client of yours approaches us for a service that you offer, we will contact you directly and offer you a right of first refusal. This will enable all of us to do what we specialize in. You can focus on your Canadian work where you are an expert and we can do the American work.

I am a Canadian accountant with a few US clients. Can you take care of their US returns for me?

Not only can we take care of their US returns, but we will work with you to ensure their Canadian returns are filed in an optimal manner to ensure that deductions and credits are maximized in both countries. Furthermore, we pledge that we will not offer any services to your clients if you can provide them the same service. In addition, if a client of yours approaches us for a service that you offer, we will contact you directly and offer you a right of first refusal.

I am an American citizen living in Canada. I have never filed before. What should I do?

There are currently two programs available for you. One is OVDP and it will require you to prepare 8 years of tax returns & FBARs. FBAR penalties will be applied at a rate of between 5-27.5%. This is a fantastic program if you knew you should have been filing and ignored the rules or if you have deliberately lied or filed fraudulent tax returns. If you believe you might have criminal liability, this might be the program for you.

The second program is designed for Americans living abroad who have simple returns, will owe little to no tax and didn’t realize they should be filing.

If you fall somewhere in between the two categories, make an appointment with one of our people who will guide you in which process is best for you.

What are some of the items that I need to concern myself with as an American citizen living in Canada?

For the American living in Canada, tax planning is a necessary part of life. By properly structuring your affairs, you can enjoy the benefits of being American without paying an arm and a leg each year. Some items to look for include:

1. RRSP
2. RESP
3. TFSA
4. Mutual fund, ETF, REIT investments
5. Ownership of greater than 10% or 50% of a non-US company or partnership.

Each of the above items have adverse tax ramifications in the USA. Ownership of these vehicles can cost you significantly, either in taxes or professional fees to prepare the necessary annual forms.

We understand that this is all a shock to you and that cleaning up these matters can be very expensive. For anyone heavily invested in any of the above categories, we will work with you to ensure that your returns can be properly prepared and at an affordable price. For further information, see our website, follow our blog or make an appointment with our tax specialist who can guide you through this.

What are some issues that are taxed differently in Canada and the USA?

In Canada, there are a few items that are taxed more favorably than in the USA. Some of them include:

1. Dividend income
2. Capital gains
3. Sale of your home
4. Gambling income

As these items are taxed more heavily in the USA, proper planning is essential to ensure you have sufficient tax credits available to cover the taxes that may be imposed on this income. The most important thing to do is to plan for these items. Proper tax planning makes US & Canadian tax much simpler for you. For further information, see our website, follow our blog or make an appointment with our tax specialist who can guide you through this.

I am a Canadian interested in buying property in the USA. What should I do?

This depends on various factors. Is the property an investment property or a vacation property? Do you plan to have it jointly owned or will you own it yourself. Do you intend to hold it the rest of your life?

Usually, the best approach will be one that will minimize estate tax exposure while reducing the risk of withholding on income and gains on the property while being held. In order to find out what approach is best for you, please make an appointment with our tax expert who will guide you through the process.